The Shareholder’s Meeting of Latvenergo AS will be held, where decision on unbundling of transmission assets and reduction of the share capital will be taken
April 16, 2020
On 8 October 2019, the Cabinet of Ministers of the Republic of Latvia supported full ownership unbundling of the electricity transmission system operator with 1 July 2020 as the deadline for fulfilment. Unbundling of transmission assets is planned through the reduction of the share capital of Latvenergo AS by withdrawing from the base of assets of Latvenergo AS the capital shares of Latvijas elektriskie tīkli AS. After the capital shares of Latvijas elektriskie tīkli AS become property of the state, they will be invested in the share capital of Augstsprieguma tīkls AS.
In 2019, revenues of Latvijas elektriskie tīkli AS amounted to EUR 41.1 million, profit was EUR 9.5 million, the value of assets at the end of 2019 reached EUR 663.0 million, while equity amounted to EUR 233.8 million. Along with the unbundling of Latvijas elektriskie tīkli AS, Augstsprieguma tīkls AS will also take over all the liabilities of Latvijas elektriskie tīkli AS. At the end of 2019, borrowings of Latvijas elektriskie tīkli AS amounted to EUR 196.3 million.
The Shareholder’s Meeting to pass a decision on the reduction of the share capital will be held on 24 April in the premises of Latvenergo AS at Pulkveža Brieža Street 12, by using remote connection options.
In accordance with the assessment of independent third parties, the capital structure indicators of Latvenergo Group are better than those of most of industry companies and those will be preserved also after the share capital is reduced. Last year, on 15 October, the international credit rating agency Moody’s affirmed the credit rating of Latvenergo AS on the investment grade Baa2 level with stable outlook. Moody’s took into consideration the planned unbundling of electricity transmission assets from Latvenergo AS, when determining the credit rating of Latvenergo AS. Moody’s emphasised the positive competitive position of Latvenergo Group on the Baltic electricity market, efficient and environmentally friendly hydropower plants, the share of distribution revenues, as well as the strong financial situation as positive factors.